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WELCOME TO NAIR
Name
spmgt@mail.rscbrc.ac.in
09974003522
http://www.scribd.com/shai lendra_jaiswal
Vision And Mission . Business Environment Analysis . Innovation Management. Value chain management and Business Models .
SUSTAINING /PROTECTING
Normal curve
ENVIRONMENTAL CONCERNS
MEGATRENDS
FORCES SHAPING THE WORLD
ECONOMIC
T E C H N O L O G Y F L U X
STRENGTH FLEXIBILITY
GREAT OPPORTUNITIES
OPP
I N C R E A S I N G E X P E C T A T I O N
WEAKNESS
EXECUTION
SERIOUS THREATS
SOCIAL/POLITICAL/ REGULATORY GLOBALIZATION
Why should we try to deepen our understanding of external environment and its impact on Railways
Relative National Share of Global Economic Output (1500 ACE to 2050 ACE)
35%
India & China: the two largest economies of the 16th, 17th and 18th centuries
30%
China
25%
India
20%
15%
10%
UK
Russia
Japan
5%
T ime
1800
1900
2000
US
China
India
UK
Japan
Russia
China-EU
100,000
China-US
India-EU
India-US
India-China
80,000
GDP (Billion $)
20,000
2000 India China 2010 2020 US A 2030 EU25 2040 2050 Years J apan 2060 Russia 2070 Brazil 2080 2090 2100
The US and EU continue as major powers till the 2030s, after which China will typically lead for up to 50 years, while India comes up from behind
Maturity
Growth
Start
S CURVE
ADAPTING / LEARNING
J CURVE
Power law
Normal curve
S curve
SUSTAINING /PROTECTING
ADAPTING / LEARNING
India-China-EU
500
India-China-US
400
300
200
100
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100 Years India China US A EU25 J apan Russia Brazil
India and China in competition as potential lead knowledge powers followed by US and EU?
MEGATRENDS
PERVASIVE COMPUTING
DEVELOPMENT IN TELECOMMUNICATION
Urbanization
Big cities getting biggerand poorer 66% of world in cities by 2030 2007: 3.2 billion people in cities - a number larger than the entire global population of 1967
URBANIZATION
GLOBAL WARMING
ENERGY/POWER
BIOMECHANICS
HUMAN/MACHINE
CLEAN
ATRACTIVENESS PERFORMANCE
SAFE
MORE TRAFFIC
(FREIGHT/PASSENGERS)
CONFORTABLE
SAME NETWORK
New technologies
MATERIALS
LIGHT WEIGHT SMART
Interoperability
Systems integration
MECHATRONICS
WHEEL/RAIL STEERING,SUSPENSIONS
STRUCTURES
OPTIMIZATION DESIGN FOR MANUF
AERODYNAMICS
CFD NOISE INDUCED
Casinos
Corporate Reception Airports Areas Shopping Malls Stadiums Pub, Club, Bars
Railway Stations Taxis, Trams, Buses High Street Retailers Grocers Petrol Stations
Hair Salons
35 Advertising Classifications
LOCATION ATTRACTIVENESS
Megatrends/MajorShifts
From Nation-States to Networks From Traditions to Options From Export-Led to Consumer-Driven From Government-Controlled to Market-Driven From Farms to Supercities From Labor-Intensive to High Technology From Male Dominance to the Emergence of Women From West to East
MEGATRENDS
Aging demographics Energy Volatility & Rise of Alternatives Connectivity / Web 2.0 Global Warming & Rise of Green Products Focus on China/RDEs Rise of Urbanization/ I Infrastructure
Rise of Services
Innovation imperative
Globalization
RDE* challengers
Economic volatility
Global divides
Entertainment/ celebrity
CURRENT ENVIRONMENT
The industry is driven by the economy and subject to political intervention The industry competes with other modes The industry is impacted by technological changes Railways is confronted with the changing pattern of industrial production and geography away from traditional industries and clusters towards a more dispersed pattern embodying high value and low volume manufactures. A transforming economy in India, which is shifting from a primary bulk commodity production system to a specialized manufacturing system with increasing contribution from the services sector. A global economy which is getting highly integrated and where the options to source raw materials, production source, intermediate finished goods and markets for finished goods can be varied and change from one cycle to another. A growing and urbanizing population in India, whose transportation needs are driven by an affluence leading to increased requirements of onboard and off board services.
When the winds of change are blowing, some build shelters and some build windmils . . .
1. 2. 3.
4.
PhotoDisc
Economic
Purposes: To find how economic factors may affect on the business. Areas to be considered: Consumer activities, such as spending patterns Economic conditions, such as inflation, unemployment, growth, etc. Government policies, such as fiscal, monetary, exchange rates, etc. The changes in production and labor market
Purposes:
To find what competitive advantage a business may gain by social changes.
Areas to be considered:
Aging population trend, which may increase services for old people Birth rate increase, which may affect baby product markets Security condition, e.g. increase in crime may cause a business to increase insurance costs Pressure groups, such as environmental groups, local community groups, etc. which may prevent a business from polluting a river
2.
Social
3.
4.
PhotoDisc
Purposes: To find how new technologies might affect the transport /business activities. Areas to be considered:
1. 2. 3. 4. The rate of technological change The development of IT The wide use of Internet The creation of new materials for production Impacts: All these technological changes will lead to some effects on the business, such as the product of the business may be replaced by new products or its production methods may have become out of date.
Economic
Social
Technological
PhotoDisc
IMPACT
15 16
17 18 19 20
Globalization Liberalization of Indian economy Economic growth and spatial dispersal Demographic Changes Population growth and urbanization Scarcity of fossil fuels and natural resources and Rise of alternative sources of energy new materials Rapid advancement and spread of information and communication technology Lifestyle changes Rising levels of education Fashion Media Climate Change and Environmental concerns Transparency and regulatory Environment Rise of services
5 6
7
8
9 10
Globalization Liberalization of Indian economy Economic growth and spatial dispersal Demographic Changes Population growth and urbanization Scarcity of fossil fuels and natural resources and Rise of alternative sources of energy new materials Rapid advancement and spread of information and communication technology Lifestyle changes Rising levels of education Fashion Media Climate Change and Environmental concerns Transparency and regulatory Environment Rise of services
5 6
7
8
9 10
Globalization
HRD
ELECTRICAL/ENERGY MANAGEMENT
3 4
Economic growth and spatial dispersal Demographic Changes Population growth and urbanization Scarcity of fossil fuels and natural resources and Rise of alternative sources of energy new materials Rapid advancement and spread of information and communication technology Lifestyle changes Rising levels of education Fashion Media Climate Change and Environmental concerns Transparency and regulatory Environment Rise of services
OPERATIONS MARKETING
FINANCE
MAITENANCE/MANUFACTURING /MECHANICAL INFRASTRUCTURE /ENGINEERING SIGNALLING / IT /COMMUNICATION
6 7 8 9 10
6
7
4
5 6
160000 140000 120000 100000 80000 60000 40000 20000 Total Amount 0 Sundry Amount Other Coaching Amount Goods Amount Passenger Amount
1000
0 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 (R.E.) (B.E.)
1. Suburban traffic is more than non suburban traffic. 2. The gap between the two is now reducing. 3. Non suburban is growing faster than suburban.
20%
15%
10%
5%
0%
-5%
Bihar has clocked an annual growth rate of 14.15 per cent for the fiscal 2010-11, surpassing the GDP figures of some of the most developed states such as Gujarat, Maharashtra and Punjab. The state has witnessed a GDP growth rate of over 14 per cent thrice in the past five years.
1960-1970
1970-1980
1980-1990
Other Factors
1990-2000
'Capital'
'Technology &
Institutions'
'Labour'
'Land'
Source: TARU analysis, 2006 based on Sivasubramonian, 2000, 2004, NAS, 2006
Savings & Investment and Technology & Institutions are the primary growth drivers of the Indian economy
Land
Labour
Capital
Others
25%
20%
15%
10%
5%
0%
1911
1921
1931
1941
1951
T ime
1961
1971
1981
1991
2001
% Urbanisation
Urban CAGR
Source: Census of India, 2001
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1961-71
Natural population growth is the most important component (~ 60%) of Indian urban population growth
1971-81
Intercensus periods
1981-91
1991-2001
N et Reclassification
Urban
Rural
100,000
200,000
300,000
400,000
Trade & part of Other Services (e.g. IT/ITES) are key growth drivers that also create steady jobs. Core urban economic sectors (manufacturing, finance, Govt.) have stagnant or declining employment growth
177
34 27 61 100 77
Raw Materials* Finished Steel Total
2004-05
* Excludes traffic due to export of iron ore
2019-20
Traffic for roads, due to steel industry by 2020, would increase by 300%(approx.). The road network needs would be expanded The steel plants and mines to be integrated with the national highway development.
230 80 11 2004-05 91 33
263
Raw Materials* Finished Steel Total
200
100
0
2019-20
* Excludes traffic due to export of iron ore
Traffic for railways, for steel industry by 2020, would increase by 300%(approx.).The railway facilities would be expanded substantially Participation by the steel industry in creation of railway infrastructure
Safe mode for moving toxic material and chemicals Environment friendly- low noise and air pollution. Reduces land congestion. Generates more employment per rupee of investment than any other mode.
Strategic Long-term Climate Risks: Coastal Flooding, Drought & Glacial melt
Glacial melt
Drought
Coastal Flooding
, , ,
, -- It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most
adaptable to change. If what Darwin said is true then there is immense hope for India. In any SWOT analysis our flexibility would be our major strength and in a world where change is the only constant Indians are definitely having innate competitive advantage with their learned adaptability . Root spring of our flexibility is our diversity ,and in modern India a critical mass is exposed to diversity of language , sub cultures and social systems. Please consider the following guesstimates about the multiple language skills of Indians .
20-40%
Percentage of Indians in Global population knowing three languages Percentage of Indians in Global population knowing four languages Percentage of Indians in Global population knowing five languages Percentage of Indians in Global population knowing six languages
The skills with multiple languages and exposure to different sub cultures prepares the Indian Mind for adaptability and is one of the major reasons for success of Indian diasapora. , , -- Thre are enough reasons to hope for a bright future for India , lets not loose hope and work to convert our strength into excellence .
Automobile Opportunities
Manufacturing Auto components to meet domestic demand
Investment possible in key segments of auto components like engine and engine parts, transmission and steering parts, electrical parts, suspension and breaking parts
Nissan has identified India among the five low cost countries to manufacture its new generation compact cars
Electrical Machinery
Growth of this sector is driven by Increasing demand for power and electrification - A capacity addition of 78,700 MW has been proposed for the Eleventh Five Year Plan (20072012), translating to a higher demand for electrical machinery Rapidly growing Industrial sector Focus on investment in Infrastructure The sector has been allowed 100 per cent foreign direct investment (FDI) through the automatic route India also has many Special Economic Zones (SEZs) in the engineering sector.
Transformer production in 200809 stood at 72 million KVA, with India being a net importer of transformers
Distribution Equipment
Consumer Durables
The size of the consumer durable and electronics sector is around USD 6.6 billion The consumer durables sector grew by 26.2% in 2009-10 and in Q1 of 2010-11 recorded 29% growth Growth in Market Size between 200304 and 2007-08 Refrigerators - 81% Washing Machines - 68% Air Conditioning -217% Equipment
Market Potential can be visualized from the following Penetration Levels Refrigerator use is around 18% of the population Washing machine 6% Air conditioner less than 2% Microwave oven around 1%
Accounts for 10% of world fruit production, producing 41% of world mangoes and 23% bananas
Tourism
Travel & Tourism Demand (INR billion)
30000 25000 20000 15000 10000 5000 0 2005 2006 2007 2008 2009E 2010E 2020E 3882.6 4465.7 4921 6181.7 6008 6778.2 24252.4
Over the next decade, demand for travel and tourism is expected to achieve an annualized growth of 9.2%
Tourism Opportunities
Hotel Infrastructure
Tourism Opportunities
Rejuvenation Segment Rejuvenation segment (spas, alternate therapies, ayurvedic treatments etc) to grow to INR 194.5 billion by 2014 from INR 43.7 billion in 2009 Fitness segment Fitness segment (comprising gyms and slimming centers) to grow very fast, weight management category growing at CAGR of 13% On-ground infrastructure Huge opportunities for investment in building on-ground infrastructure like roads, rail connections, hotels, restaurants and other wayside amenities
The exports are expected to grow at CAGR of 15%, amounting to USD 58 billion by 2015 from current size of USD 25 billion
2009
2015
Source: Unlocking the potential of India's Gems & Jewellery Sector, FICCI Technopak report
Branded Jewellery
Raw Materials
Chemicals
Chemical Sector including pharmaceuticals and petrochemical has an annual turnover of approximately USD 83 billion, which is equivalent to 5% of Indias GDP. It is the 12th largest in the world in terms of volume and third largest in Asia.
Chemicals
India is the fourth largest producer of agrochemicals globally, after US, Japan and China. Petrochemicals sector expected to grow 12.5 MMT by 2011-12 Investment potential about $ 17 billion Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR) are coming up in a number of Indian states. PCPIRs are specifically delineated investment regions with an area of around 250 sq km and planned investments greater than USD 15-20 Bn. Investments of over USD 280 Bn have been planned across the three approved PCPIRs Bharuch, Visakapatnam and Haldia and three planned PCPIRs Mangalore, Cuddalore and Paradeep.
Chemicals
Indian Biotechnology industry crossed the USD 3 billion mark in FY10 (including bio-services and bio-informatics), registering a year-on-year growth of 17% The year-on-year growth of the biotech market is expected to accelerate driven by high demand for vaccines, biopesticides, biofertilizers, biodiesel and biotherapeutics in India as well as at the global level. BioPharma segment grew at a CAGR of 11.9 % in 2009-10. It contributed $1.9 bn, accounting for 62 percent market share.
Construction
The sector is among fastest growing sectors
The market value of real estate under construction projects crossed USD 100 billion in 2010 from USD 69.4 billion in end of 2006
Construction Opportunities
Residential Housing
Housing shortage to increase from more than 24 million units in 2007 to 26 million units by 2012.
Commercial The demand for office space is expected to total 180 million sq feet by 2013 Retail Cumulative Retail demand is expected to reach 43 million square feet by 2013. Around 46% of the estimated demand will be focused on tier I cities between 2009 and 2013
Infrastructure Telecom
One of the fastest growing sectors with over 15 million new subscribers being added to the network every month Second largest wireless network in the world India has emerge as the country which offers the lowest mobile tariffs across the globe.
While the mobile services space have seen exponential growth in urban areas, these have not yet reached the vast majority in rural areas with rural teledensity of approximately 27.8 percent, indicating huge untapped potential for the sector.
The rural market is expected to drive the next round of growth for the voice-based services, while data services will create the much needed churn within the maturing urban markets.
Infrastructure Telecom
Allotment of 3G spectrum and BWA licenses have been complete. This will open multiple dimensions for wireless broadband, 3G services Broadband is yet to reach a critical mass despite rapid growth; the numbers have risen from 6.98 million in August 2009 to 10.52 million by 31st October 2010, registering a growth of 55 percent on an annual basis. With subscriber penetration under 2 %, the sector has potential for aggressive growth in the future. India to evolve as a hub for telecom equipment manufacturing Several new home grown players are rapidly expanding their market presence
Infrastructure Power
A study by McKinsey called "Powering India: Road to 2017 estimates India's power demand to increase to 315-335 GW by 2017 At present, Indias total installed capacity is 1,62,367 MW Government of India projects an investment of USD 4.3 billion for renovation and modernization of various old power plants during 11th and 12th Five-Year Plans Additionally, an investment of USD 213.7 billion is proposed for capacity addition of 78,700 MW in the 11th Plan (2007-12) and USD 235.1 billion to add over 94,431 MW in the 12th Plan Immense opportunities exist for private sector participation in generation, transmission, distribution equipment
Infrastructure Railways
Railways are the lifeline of Indian economy and will have a larger role in future as the country grows It is third largest network in the world Government undertaking modernization and augmentation of railway infrastructure, improvement in passenger facilities and security PPP projects being initiated & identified The sector expected to generate private investments worth USD 4.3 billion during Eleventh Five Year Plan
Huge opportunities for various players across the value chain - power, transportation, equipment providers and internal infrastructure
Homeland Security
Growing focus on Homeland security in India in the backdrop of robust economic growth and an increasing threat of disruptive activities India to become one of the major civil security markets in the world with expected cumulative spending of over USD 10 billion by 2017
By 2020 about 6 per cent of global procurement in the field of homeland security is expected to be emanated from India
Segments to witness growth: electronic security market & system integration, consultancy and training
Major opportunities exist in security related equipment such as Intrusion detection systems, vehicle scanners, entry barriers, detection devices, access control, surveillance, Supervisory control and data acquisition systems (SCADA)
Green Technology
India is committed towards ensuring an Eco friendly growth The country targets to meet 15% of its energy requirement through renewable sources by 2020 Challenge for India harnessing renewable energy sources in terms of cost effectiveness & bring greater efficiency Opportunities in
Gaming
Gaming estimated to be the fastest growing sector in the Media and Entertainment Industry in the next 5 years Growth Drivers Mobile Gaming - Increasing telecom subscribers; Rollout of 3G & Increasing usage of mobile VAS Console Gaming - Young population; Rising disposable income & Move towards service oriented models Online Gaming - Increasing broadband subscribers; Higher PC penetration & Strong marketing through social networks etc
Gaming Industry (USD million)
Mobile Console Online & PC Total Industry Size
2009
3.7 10.1 2.5 16.3
2014
29.6 24 12.6 66.2